Wargaming.net CEO talks about the company’s explosive growth.

It was difficult to capture the size of the booth Wargaming.net had at this year’s E3 in a single photograph. I spent about 45 minutes trying to get the perfect shot, but it was impossible without a crane—maybe a helicopter. A bank of 24 gaming PCs stood on either side of a makeshift theater that sat 50 people in front of a video screen. It was a video screen that was preposterously huge, even by E3 standards. The elegant meeting room where I sat down with Wargaming.net CEO and Creative Director Victor Kislyi featured a gold, modern-art-type chandelier hanging over a long conference table covered in press books and laptops.

The developer had a small booth at E3 2011, and a moderately sized booth at the Game Developers Conference and PAX East earlier this year. But the massive E3 2012 booth seems designed to give attendees a single, unmistakable impression: we have arrived.

Humble Beginnings

Kislyi has come a long way since first designing physical games directly on the bare floor of his Belarus apartment. “We moved to a new apartment, and there was a linoleum floor. [I took] a ball[point] pen and [I drew] the landscape,” Kislyi told Ars. “I was using cotton [balls] for infantry, then cotton with dots for archers, and used watermelon seeds for cavalry. I might claim—of course humorously—that I invented Total War 20 years before they came up with it. I was playing with my brother and a couple of my friends, those Total War, massive numbers kind of battles on the floor.”

Kislyi said it cost his parents the equivalent of $1,500 to cover the damaged floor with a rug, not an insubstantial amount of money in the Soviet Union at the time. But it was worth it when WarGaming.net was founded in 1996. Iron Age, a computerized version of that linoleum-designed game, became the company’s first title.

WarGaming.net’s first hit—2003’s near-future, turn-based, hex-field strategy game Massive Assault—can also trace a humble real-world design inspiration. “The Soviet Union was relatively... I would not say militaristic, but we were preparing, just in case, for war. You know, like you guys did,” Kislyi said, indicating Americans by holding his hands spread out in front of him. “We had war stories from the Revolution, from World War II—of course we called it [the] Great Patriotic War—and I was collecting stamps. On those stamps [we had] battleships, tanks, victory anniversaries. So as a kid I was learning those things, and with a couple of my friends in the fourth grade, we re-invented Risk.”

Kislyi spoke quickly and enthusiastically, as though he couldn't get the words out fast enough. He often stopped to correct himself with a shake of the head and a frenetic gesticulation. “We did not have Risk because of the Iron Curtain, so we really did not know what it was, but we re-invented it, which afterwards became Massive Assault... well, very close to Risk, a lot of territories and strategic and tactical moves. We were making our board games playing with toy soldiers, making rules,” he said.

Breakout success

These kinds of traditional strategy games became Wargaming.net’s bread and butter for over a decade. But while the company had some critical success with titles like Massive Assault and the Square Enix-published Order of War, most of Wargaming.net’s boxed titles barely broke even. That was the situation until 2008, when the company decided to abandon the boxed retail model altogether in favor of a free-to-play MMO with an unusual source of funding.

“We were lucky to have a little sidekick business in advertising technologies, called AdRevolver, so eventually this technology was sold to Yahoo,” said Kislyi. “We got a sweet amount of millions for that, but we did not [buy] islands and Lamborghinis—we invested all that into [the MMO]. We pretty much burned all the bridges with the past. We said no more publishing deals, no more boxes, [we’re doing a ] free-to-play MMO owned by us, distributed and published and maintained by us.”

An early trailer shows the game's scrapped fantasy elements.

That MMO project would become World of Tanks, a game that plays a lot like an arena-style first person shooter. Each team of 15 tanks works together to protect their headquarters and take over the opposition’s. Vehicles range from Tier 1 light tanks like you might have seen at the beginning of World War II in 1939, to Tier 10 heavy tanks like those produced at the end of the war or shortly thereafter. More advanced players can form Clans and participate in the Clan Wars metagame, fighting for control of territories on a map of Europe.

But World of Tanks wasn’t always about tanks. Kislyi and his team were considering a fantasy-based game at first. “And then we realized that we’re [going to be competing] with World of Warcraft, Lineage, and millions of other Chinese and Korean MMOs coming to the market, so we had to differentiate,” he said. “What could we do best? Probably tanks. Let’s do an MMO about tanks.”

It seems to have been a good choice. Wargaming.net was flying under the radar prior to World of Tanks’ 2010 release, but now it's painted all over that radar. The game quickly surpassed five million registered players just before its first birthday, and crossed the 30 million player threshold in May. The company says that around 25 to 30 percent of those players actually pay money for in-game items. That's well above the low single-digit paying player percentages seen by most other free-to-play games.

Managing growth

That massive E3 2012 booth presence serves as a metaphor for the company’s explosive growth from 180 employees a year and a half ago to 900 employees currently serving across offices in Minsk, St. Petersburg, Kiev, Cyprus, Berlin, Paris, London, San Francisco, Singapore, and Seoul. And while maintaining control over such rapid growth is difficult, Kislyi is confident that his company is going about things the right way.

“If you read any business book they will tell you that doubling the company size in a year is already suicidal, so you can do the math on our numbers... but we’ve been in the business for a long time,” Kislyi said. “We manage to attract the best of the best general managers, like the guy doing Europe, Frederic [Menou]. He was running Blizzard for four years in Europe. If the guy, after Blizzard, decided to join [our] company…it means something.”

Kislyi intends to keep the momentum going, even if the success of World of Tanks has set expectations high. “[WoT follow-up] World of Warplanes, the actual work, like design and experimenting, started just a little bit more than one year ago... and now you can see people sitting and playing, and we have this closed beta. One year. So, we know the secret of fast development,” Kislyi said.

What makes the growth and expansion of Wargaming.net even more difficult is the need for local offices to serve regional markets. “We don’t believe in the concept that someone in, let’s say Taiwan, can make a game out there and then sell it to America with a couple of twists,” said Kislyi. “You have to know for whom you’re making your game, from ground zero. Game design, monetization, visual style, historical accuracy…”

Managing pieces in so many disparate territories, which all require localization, requires patience and tolerance, Kislyi said. “It’s a hard dilemma not to fall into that rigid, 100 percent corporate structure some other big companies have, like…let’s say [a] platform company has its own divisions actually competing and fighting against each other. We cannot afford that.... [There are] different cultural views and sometimes very heated business arguments about how do we do this and that. Do we put this or that in the game or in the PR campaign? Every day is hard work.”

The expansion is made even tougher by World of Tanks’ free-to-play monetization model, which depends on keeping large numbers of players engaged and making small microtransactions that add up to large revenues. If those players start leaving the game, all that growth-driving profitability could go out the window very quickly.

But Kislyi is confident in WarGaming.net’s current position. “Right now we have [a] very healthy cash flow to fuel the growth. [Our main source of risk is] people we need to have or we don’t have, headhunting-wise. We need more people than we have. It’s good to be in the position when money is not the first consideration, right? You have to observe business care and metrics anyway…but our primary challenge [is recruiting] the best of the best people [who] we want to come aboard.”

UPDATE: The original version of this article used a slightly outdated figure of 20 million players for world of Tanks. Ars Technica regrets the error.

Dennis Scimeca is a freelance writer from Boston, Massachusetts. You can enjoy his random excitations on Twitter: @DennisScimeca.